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  1. #711
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    Glass Earth has recently been granted EP 53184, 1432.5 Ha in Otago, and has applied for (EP)54765.
    The latter permit application is a bigger one, and both are sitting just above the Macraes Mine area, north of Dunedin.

  2. #712

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    You must be pleased with the recent price action, elZorro? Good for you.

    I took the conservative option and bought more physical bullion, rather than shares.

    What do you think the future share price potential of GEL is, if they strike it big?

  3. #713
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    Quote Originally Posted by Citizen Erased View Post
    You must be pleased with the recent price action, elZorro? Good for you.

    I took the conservative option and bought more physical bullion, rather than shares.

    What do you think the future share price potential of GEL is, if they strike it big?
    You should do all right with gold bars CE. Certainly while open-ended QE3 is in progress. OGC is perhaps another local stock which will follow gold, but at a bigger percentage margin both ways. I'm unsure why Baker Steel is backing out of it, they usually know what they're doing.

    But the big question is, where could GEL go from here? Worst case, a big mine is a long way off while they wait for a good few intercepts. They still have their placer mining permits, which can fund exploration and overheads given basic grades of ore to work through. So I can't see them going backwards from here, unless a large capital cost looms up.

    However I'm increasingly optimistic that one of the next drill(s) at WKP could hit the mother lode. Either the intermediate gold veins from the original epithermal event (a feeder zone rather than the broken surface expressions), or a concentrated seam trapped by the adjacent andesite. I still have a lot of research to look into when I have time, these documents are held on the NZPAM website. It looks like the geothermal waters that brought up the gold from the lava below, were coursing through the WKP area for many many years. There is still a warm spring near the WKP Stream.

    What do we know about the Hauraki gold mines from 100 years ago? The old miners were bringing out gold from the underground veins that averaged 3oz per ton. Colossal grades nowadays. No-one has yet found consistent veins like that at WKP, but some short intercepts are at that level. As we have seen, the area is rugged, hard to get to, it discourages long-term drilling. For that you need a big partner like Newmont.

    There have been mentions here and there estimating about 3Moz, even 5Moz of gold at WKP. Considering the big mineralised area, and comparing it with Waihi's Martha mine (11Moz), that sort of level doesn't seem impossible. Lihir for example is a lot bigger (40Moz), but they can opencast it.

    WKP is of little value until the grades and continuity are at a level where Newmont see they can profitably underground mine it. If Correnso is anything to go by, 0.5 oz/tonne and say 3 to 5Moz total would probably get them interested. It's a bigger step up than Correnso, where they are beside existing structures and equipment. That's why the WKP assays are so important.

    At 15grams/tonne average grade, a volume of ore 300 metres square and 70 metres deep would yield about 6.3Moz of gold. If the ore is 3 oz/tonne grade average then they'd need only one sixth of that volume. But as you can see, it's not a very big volume compared to WKP's mineralisation area. Drilling at 200 metre spacings to find that high-grade gold (if it's there) could take a while, but they seem to be getting closer. Every drill finds gold.

    Proven/probable gold in-ground is worth about US$250 an ounce, maybe a bit more as the price keeps going up. This theoretically puts GEL's 35% share of say a proven 5Moz resource as about $440 million. Shares would then be worth about US$5.50 each, NZ$6.90, a 1470% increase on today's price. But in the scary world of the junior explorer, this is not the norm, they don't all find enough gold for a mine, as Brent Cook pointed out. It's very heartening to see someone like Brent Cook backing GEL as one of 20 junior explorers that have a good chance of making it.
    Last edited by elZorro; 05-10-2012 at 06:29 AM. Reason: Proven/probable gold's worth $250/oz or more

  4. #714
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    I never covered Geology, so the research papers on WKP left me bewildered about the age of gold and silver mineralisation. Somewhere between 6 and 7 Ma. Wikipedia had the answers:

    The volcanoes off the West coast of the North Island, together with Taranaki and the Tongariro Volcanic Centre, are responsible for the black iron sand on many of the beaches between Taranaki and Auckland.
    Shortly after (18 Ma), a volcanic arc developed further east to create the Coromandel Ranges and undersea Colville Ridge. The initial activity was andesitic, but later became rhyolytic (12 Ma). In the Kauaeranga Valley, volcanic plugs remain, as does a lava lake that now forms the top of Table Mountain. Active geothermal systems, similar to those that now exist near Rotorua, were present around 6 Ma, and produced the gold and silver deposits that were later mined in the Coromandel gold rush. Later (5-2 Ma), volcanic activity moved further south to form the Kaimai Range.
    After this, activity shifted further East to the Taupo Volcanic Zone, which runs from the Tongariro Volcanic Centre (Ruapehu and Tongariro), through Taupo, Rotorua, and out to sea to form the Kermadec Ridge. Activity was initiated around 2 Ma, and continues to this day. The Tongariro Volcanic Centre is composed of andesitic volcanoes, while the areas around Taupo and Rotorua are largely rhyolitic.
    The other part of the puzzle: 1Ma is 1 million years before the present day. This means that around six to seven million years ago, an active geothermal system was present at the WKP permit. It would have looked similar to what is seen around Rotorua today. It looks like the andesite material was there much earlier, then the rhyolitic intrusion occurred, followed by the geothermal activity and quartz gold/silver mineralisation which which is laid down in fissures in the host rocks, as veins.

    So this mineralisation was probably not laid down in a few years, but over hundreds of thousands of years. Geologists look for hydrothermally altered rocks by mapping the magnetic or resistive signatures of a large area. Glass Earth (and Newmont) will have staff adept at using the computer mapping software, and no doubt the aeromagnetic survey carried out around the time of the IPO is still useful. They've added more field data since. Even the old 2D aeromagnetic map in the 1990 Rabone paper looks interesting.

    Since the hydrothermally altered rock at WKP covers 3km x 2km, and also extends 3km Southwest, it's quite possible WKP links up with the mineralisation at Golden Cross Mine. Coeur Gold still hold the immediate area around their mine.
    Last edited by elZorro; 05-10-2012 at 10:14 PM.

  5. #715

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    EZ, can you explain to a newbie like myself, why there is such a wide variation in the current share price on the TSX and NZX? I mean, even with the higher brokerage fees, you'd be much better off buying on the TSX at the moment (a 27% discount).

  6. #716
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    Hi CE, yes, you're right, the NZ price is overblown compared to the TSX price. Considering the volume is higher over there, most days we should be following their price. Some of the retail investors over there might feel they're a bit out of the loop, and will look to the NZ share price for guidance. If you try buying through Direct Broking, I don't think they do it anymore, and most banks charge a big spread on buy/sell, so if you do give it a go, get one of those foreign exchange trading accounts set up, or make longer-term decisions.

    Here's some disturbing news from the TSX after the end of trade Friday evening, and no, it's not on the GEL website yet. It wasn't shown on the NZ exchange today either, in what is a very bad oversight.

    http://tmx.quotemedia.com/article.ph...&qm_symbol=GEL

    Head Office needed CAD$360,000 in a bit of a hurry. Since the terms are exactly the same as the previous big PP deal of June/July, I can only assume Woolwich International has bought another 1.8mill shares for a firesale price. In turn, this means that the placer at Drybread is not yet doing any better than covering most of its costs.

    Could this explain why we have not been given much information about the equipment and progress on the placer sites for quite a while? One of the company's biggest asset purchases, and no progress data for the market. Except we now have to guess that either the placer grades are not terrific, or the machines (GRUs) are not correctly tuned up yet. Or both.

    This asset purchase of GRUs and other mining equipment came with some permits and applications, most of which have been dropped in the latest economising/rationalising round. The company effectively paid a lot of goodwill to Bob Kilgour. And they now also have a bigger staffing level, which is great if the operation is making good profits.

    I think the shareholders deserve to see a much more open policy for disclosures and press releases. If we can't have information on certain parts of the company operations, we should be told why not, and in the meantime I'm unsure what to say about the valuation of the company. The person(s) with the chequebook says CAD 20c.

    I still say that's a bargain, but then I suspect this outfit knows a lot more about the company's prospects than you or I do. At least they're still investing.
    Last edited by elZorro; 08-10-2012 at 07:54 PM.

  7. #717
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    Glass Earth raises more capital
    SimonHartley — 12 October 2012
    Small-scale Otago gold producer GlassEarth Gold Ltd (NZAX & TSX-V: GEL) has raised a further $C360,000($NZ456,000) in private placement funding as it juggles cash-flows againston-going exploration costs at North Island prospects.Glass Earth remains one of thecountry's largest gold explorers with two other targets being drilled in theHauraki region, including a joint venture on the WKP project with Waihioperator Newmont Waihi Gold.
    In late-June Glass Earth clinched$2.95 million from private placements, to refinance the $4 M buy-out of itsformer joint venture partner, then for the half-year to June booked a $8.49 Mloss on the back of accumulated exploration cost writedowns.
    Glass Earth has spent almost $40 M inless than six years exploring around the country, much of it around Otago;largely from Canadian investors on the Toronto stock exchange's and ventureexchange.
    Glass Earth chief executive, SimonHenderson, has said recently cash allocation has been refocused on the goldtargets with the best potential, plus there had been a pruning of its overallportfolio of prospects.
    A target of producing $2 million ofgold had been set for the second-half of this year from the Maniototo, withgold revenue targets in 2013 of $6 M.*Simon Hartley is senior businessreporter for the Otago Daily Times.


    This was on NZResources today, maybe it'll be in the ODT as well. Looks like more information will be dispersed in due course.

  8. #718
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    I have missed something in the press release for the last private placement:
    The proceeds of this private placement will primarily be used to provide for exploration and acquisition activities.
    This was pointed out to me in an email from Simon Henderson. Some kind of a deal is in the wings perhaps.

    Another comment was about placer recovery rates:

    The alluvial mining has been going well for the last two months, both plants are working smoothly and producing 30-40 oz each per week, i.e. cumulatively 70-80 oz/week. Our best week to date is 97oz.
    All this puts a new, more positive complexion on the press release. I'll have a look at my placer spreadsheet to see how that looks, but the placer operation could well be turning a profit, not too bad at this stage of the proceedings.

    Strenuous efforts are also being made to get prompt assay results from drill WKP35.

    The spreadsheet results were that the average grade could be about twice the cutoff value, and at the moment, annual gross profit after Dunstan Mining and the placer team are paid, would be approx $4mill p.a. assuming no great maintenance overheads. Some of the return will go to the landowners. But there could be about $75,000 a week spare cashflow.
    Last edited by elZorro; 15-10-2012 at 07:57 PM.

  9. #719
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    Further to communication received from Glass Earth (both Simon Henderson and Thomas Rabone):

    Placer results are a snapshot in time, and until a few more weeks have passed, they will be careful about what is reported as the recovery ounces. For security reasons as well as commercial reasons, they cannot separate out the results from each GRU. That's understandable. However, they are using some new technology like variable speed motor drives (VSDs) to improve the results over older methods. Sounds good.

    Simon Henderson: I think it's fair to say we're not reluctant to publicise this, just making sure we don't over promise or jump too soon, and can record good, robust production over a meaningful period.
    Regarding the rationalisation of the permits:

    SH: We have not reduced any of the significant alluvial assets, and remain optimistic that there is a lot more alluvial/placer potential out there. We have dropped significant portions of our second tier hard rock exploration targets that we don't wish to pursue. The costs of holding these permits was in excess of $250,000 p.a..
    On WKP:

    SH: We're committed to long-term success, and that means getting reliable and important information out promptly. This has been frustrated on our most important project by the assay turnaround at WKP, we still await "urgent results" on WKP 35. I've just been in Waihi trying to facilitate better information and assist Newmont in getting better assay turnaround.
    I had a quick phone call with Thomas Rabone, he's on the staff of GEL. His father is Dr Stuart Rabone, a geologist well versed in the terrain around WKP and Golden Cross. Thomas has formal legal training, has worked underground, and is helping get things sorted out at Alexandra in the meantime. I think I detected a lot of optimism for the months ahead.

  10. #720
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    Question November (27)th Report...

    Hey elZorro,

    I’m starting to take an interest in GEL, so I had a look at the earnings report ended JUNE 2012. Glancing over it, I see that it mentions that Gold recovery was “thwarted by the snow of the southern winter" and that there were high establishment costs that quarter (which are now resolved).

    The report also mentions the fact that the second Gold Recovery Unit (GRU) became operational in late May and therefore is only partially reflected in the result. Furthermore, the third GRU became operational only in the last few days of June.

    Considering the last report barely took into account two of the GRUs, what is your opinion on the result GEL will release in November? (How big are these two GRUs..?)
    Last edited by gonzo56; 24-11-2012 at 06:36 AM.

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